- Prachi Singh |
Safilo Group S.p.A. closed the first 9 months of 2019 with the net sales of the continuing operations at 708.7 million euros (780.5 million dollars), up 5.2 percent at current exchange and 2.7 percent at constant exchange rates. In the 3rd quarter, the company’s net sales of the continuing operations were 212.8 million euros (234.4 million dollars), up 2.2 percent at current exchange and up 0.1 percent at constant exchange rates.
Commenting on the financial update, Angelo Trocchia, Safilo Chief Executive Officer, said in a statement: “In the third quarter of the year, we continued the improvement of our results, working with determination on those priorities aimed at enhancing our group’s assets, in particular strengthening our commercial capabilities and enhancing our digital agenda. We renewed two strategic partnerships relating to the Boss and Hugo licenses and the supply agreement with Kering Eyewear, and we prepared for the launch of our new licenses David Beckham, Levi’s and Missoni.”
Review of Safilo’s nine month and Q3 sales results
The company said, performance in the first nine months was positively influenced by a 3.2 percent growth of the European market, and by the recovery of the main emerging markets, particularly significant in Asia Pacific, which improved 22.5 percent. Turnover was down 2 percent at constant exchange rates in North America. The wholesale business increased by 6.4 percent at current exchange rates and by 3.7 percent at constant exchange rates, with Europe up 5.6 percent.
The company added that the quarterly performance of the top line was influenced by the expected decrease, starting from the second part of the year, of the business relating to the production agreement with Kering, while the wholesale revenues recorded a growth of 5.2 percent at current exchange rates and of 2.8 percent at constant exchange rates, driven by a double-digit revenue growth in Europe, supported by a double-digit growth also of the main distribution channels in Asia and core markets in Latin America.
The company further said that the North American business recorded a 7.7 percent drop at constant exchange rates, mainly reflecting the consolidation of all the North American logistic activities in the new Denver warehouse, a start-up temporarily affecting the performance of Smith sport products. The quarterly performance also confirmed the good growth of the Carrera and Polaroid brands and the positive trends of the main licensed brands.
Highlights of Safilo’s operating performance
On a pre-IFRS 16 basis, Safilo closed the first 9 months with an adjusted EBITDA of the continuing operations of 43.9 million euros (48.3 million dollars), in line with the result recorded in the first 9 months of 2018. During the period, the gross profit reached 375.1 million euros (413 million dollars), with a margin on sales of 52.9 percent and an increase of 8.8% compared to the same period of the previous year. Third quarter adjusted EBITDA of the continuing operations equalled 9.7 million euros (10.6 million dollars), with a margin on sales of 4.6 percent compared to 13.7 million euros in the same quarter of 2018.
On an organic basis, Safilo said, the group’s operating performance saw some improvement of the gross profit, up 3.7 percent to 109 million euros (120 million dollars) and a further recovery in terms of lower overhead costs.